I am not even going to try to explain why this matters. Those who know, know, and those who don't, probably aren't interested. From an opinion by Social Security's Acting Regional Chief Counsel for Region VII:
State law generally provides that a minor may enter into a bona fide loan agreement with an adult, but the minor maintains the right to disaffirm the agreement upon reaching the age of majority, absent factors such as the minor's own misrepresentations concerning his or her age and good cause reliance by the adult, or emancipation by marriage.
State law provides parents have a legal obligation to support their children. Therefore, a parent may not loan an apportioned share of household expenses to a child he or she is already legally obligated to support. Guardianship and foster care cases must be reviewed on a case-by-case basis to determine if an in kind loan is proper.
It probably has to do with an SSI case. The maximum SSI payment is reduced by income received, including non cash income such as free room and board. When a child is in the parent's household it is usually not an issue but if the child lives in the household of another (such as that of a grandparent or other relative) the value of the free room and board will reduce the payment. When there is a bona fide loan agreement that the claimant will repay the householder for he/her share of expenses the free room and board is not considered as income and therefore does not reduce the SSI payment.
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